Yangtze Memory Technologies, Inc. v. Strand Consult
5:24-cv-03454
N.D. Cal.May 20, 2025Background
- Plaintiffs Yangtze Memory Technologies Company, Ltd. (YMTC, a Chinese company) and its U.S. subsidiary YMT-USA (based in California) sued Strand Consult (a Danish firm), Roslyn Layton (its EVP), and DCI Group (an Arizona LLC) for commercial disparagement relating to alleged false statements published on the China Tech Threat website targeting YMTC.
- The initial complaint included state law claims; the amended complaint dropped those and brought only Lanham Act claims, naming DCI as a new defendant.
- Defendants moved to dismiss the case on several grounds: lack of personal jurisdiction, lack of subject matter jurisdiction, and failure to state a claim.
- The court reviewed whether it had personal jurisdiction over DCI (Arizona, DC), Strand Consult, and Layton (Denmark), considering both California-specific and nationwide contacts.
- Plaintiffs generally alleged group conduct, focusing on articles published on a passive website and the use of U.S.-based web infrastructure (e.g., Cloudflare), but provided minimal specific allegations tying defendants' conduct to California or the U.S.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over DCI based on California | DCI aimed false statements at CA, harmed YMT-USA | DCI has no relevant CA ties; passive web presence | No jurisdiction; complaint dismissed as to DCI w/o leave |
| Personal jurisdiction over Strand Consult/Layton | Targeted U.S./CA markets, used U.S. infrastructure | Passive website; activities not aimed at forum | No jurisdiction; dismissed w/ leave to amend |
| Use of U.S. web infrastructure as basis for jurisdiction | Use of CA-based Cloudflare CDN creates needed contacts | Web hosting location is irrelevant, not aimed at forum | No; insufficient for personal jurisdiction |
| Jurisdictional discovery | Entitled to further discovery on defendants' contacts | No colorable basis for jurisdiction | Denied, speculation insufficient for discovery |
Key Cases Cited
- Daimler AG v. Bauman, 571 U.S. 117 (general jurisdiction requires corporation to be "at home" in forum state)
- Calder v. Jones, 465 U.S. 783 ("effects" test for purposeful direction in tort cases)
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (due process limits on personal jurisdiction)
- Walden v. Fiore, 571 U.S. 277 (forum contacts must arise from defendant’s own conduct)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (minimum contacts for specific jurisdiction)
- Holland Am. Line Inc. v. Wärtsilä N. Am., Inc., 485 F.3d 450 (passive web presence insufficient for Rule 4(k)(2) jurisdiction)
- Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 (purposeful availment/direction framework in Ninth Circuit)